The paper describes the status and context of the Chinese Open Source Software (OSS) industry and ecosystem based on the analysis of the components of the China OSS Promotion Union. The analysis involves comparisons of several main Chinese developers of Linux operating system and makers of open source counterpart of the popular Microsoft Office package as well as several main Chinese OSS communities. Comparisons concern the technological and business aspect. The findings reveal peculiarities of the divergence of innovative activities of Chinese companies, as well as indicate that the strong government support may at the same time limit the technology selection under rigid competition, especially as foreign open source companies are found to be more focused on hobbyist developers and are able to maintain larger independent communities. Implications of the paper include the need to coordinate global development efforts and adjust science & technology policies in order to stimulate both the development and the diffusion of open source among Chinese companies and individual hobbyists.